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Leveraged Buyouts Aren’t Rescuing Struggling Retailers Anymore


Once upon a time struggling retailers could always fall back on a leveraged buyout if things got too bad, but experts say those days are behind us.

Leveraged buyouts were once fairly common amongst retailers, but last year LBO transactions fell to $1.9B from $8B in 2015, the Wall Street Journal reports. LBO deal values have been falling since their peak of $30.5B in 2006.

Experts say the change is linked to a drop in high-yield debt issuance and the fact that several well-known leveraged buyouts recently ended in bankruptcy, Sports Authority and Deb Stores Holdings chief among them. Investors are also largely of the opinion that U.S. retailers are facing across-the-board declining profits as sales shift toward e-commerce. [WSJ]